IL Committee Looks at Whether State Should Require State Retirees to Pay a Portion of Healthcare Costs

The Illinois Channel will televise some of the Government Forecasting and Accountability committee hearing, which heard testimony Wednesday on whether the state should require retired state employees to pay for a portion of their healthcare costs.

While changing the pensions on retirees may be unconstitutional, healthcare costs are NOT constitutionally protected.

At this time the state spends about $457 million on RETIREE costs, covering approximately 84,100 individuals. Some of those are family members of former state workers.

Before Gov Edgar's administration, workers had to only put in only 8 years of service to the state to get a LIFETIME of free healthcare benefits. Under Gov Edgar, this was changed to 20 years of service.

Watch this issue, as a majoy tussle this spring. Should the state begin charging retirees to pay a portion of their healthcare benefits -- it could add up to a major new source of income to the state. Some of the changes however may have to wait for a new contract with state workers, which may mean any changes in benefit costs could not take effect until July 2012.

House Republicans Offer Three Measures to Counter President's Healthcare Law

From the IL Policy Institutue

CHICAGO - The Illinois Policy Institute, a non-partisan free market think tank, applauds Illinois House Republicans for introducing three bills aimed at lessening the negative impact of President Obama's federal health care legislation. The Illinois measures include prohibiting enforcement of the mandate requiring individuals to purchase health insurance coverage, directing the Commission on Government Forecasting and Accountability (COGFA) to examine the fiscal impact of federal health care reforms on the Illinois state budget, and legislation urging the Illinois Attorney General of to file suit challenging the law's constitutionality.

"We applaud House Republicans for introducing legislation aimed at mitigating the adverse impact of the deeply flawed health care law," said Kristina Rasmussen, Executive Vice President, Illinois Policy Institute. "At a time when Illinois is experiencing record unemployment and deficits, this new federal law will cause unnecessary harm to our economy. Illinois residents can thank Representatives Mitchell, Bellock, and Mathias for their swift response to the over-reaching, unaffordable federal health care takeover."

Details on Illinois House Republican Legislation:

Prohibition on Individual Mandate (HB 6842, Rep. Bill Mitchell) - The federal health care reform includes a mandate for individuals to purchase health insurance if they do not currently have coverage. The "Health Freedom from Individual Mandate" legislation seeks to amend the Illinois Insurance Code to prohibit the enforcement of an individual mandate providing this prohibition on requiring individuals to obtain or maintain insurance should not render an individual liable for any penalty, assessment, fee, or fine as a result of failure to procure or obtain health insurance coverage. This proposed legislation is based on current Virginia law.

Resolution on GOFA Analysis of Fiscal Impact of Health Reforms (HR 1074, Rep. Patti Bellock) - The federal health care reform expands the Medicaid program and makes numerous other reforms that may grossly impact the state budget. Governor Pat Quinn has publically stated the fiscal impact of these reforms is not yet known and the State has not determined a cost estimate. This resolution provides for the Commission on Government Forecasting and Accountability (COGFA) to conduct an examination of the fiscal impact of the federal health care reform on the Illinois state budget.

Resolution Urging Attorney General to Seek Relief from Federal Health Care Reform (HR 1075, Rep. Sid Mathias) - This resolution urges the Illinois Attorney General to file suit against the United States Department of Health and Human Services, the United States Department of the Treasury and the United State Department of Labor, challenging the constitutionality of the "Patient Protection and Affordable Care Act." The complaint alleges the Act represents an unprecedented encroachment on the sovereignty of the States in protecting the freedom, public health and welfare of their citizens by mandating (1) massive increases in state Medicaid enrollments and by (2) impairing individual citizen's rights to make health care decisions, including the decision not to participate in any health care insurance program or scheme.

Investors Business Daily Editorial: 20 Ways President's Healthcare Plan Limits Your Freedoms

from Investors Business Daily: http://blogs.investors.com/capitalhill/index.php/home/35-politicsinvesting/1563-20-ways-obamacare-will-take-away-our-freedoms

With House Democrats poised to pass the Senate health care bill with some reconciliation changes later today, it is worthwhile to take a comprehensive look at the freedoms we will lose.

Of course, the overhaul is supposed to provide us with security. But it will result in skyrocketing insurance costs and physicians leaving the field in droves, making it harder to afford and find medical care. We may be about to live Benjamin Franklin’s adage, “People willing to trade their freedom for temporary security deserve neither and will lose both.”

The sections described below are taken from HR 3590 as agreed to by the Senate and from the reconciliation bill as displayed by the Rules Committee.

1. You are young and don’t want health insurance? You are starting up a small business and need to minimize expenses, and one way to do that is to forego health insurance? Tough. You have to pay $750 annually for the “privilege.” (Section 1501)

2. You are young and healthy and want to pay for insurance that reflects that status? Tough. You’ll have to pay for premiums that cover not only you, but also the guy who smokes three packs a day, drink a gallon of whiskey and eats chicken fat off the floor. That’s because insurance companies will no longer be able to underwrite on the basis of a person’s health status. (Section 2701).

3. You would like to pay less in premiums by buying insurance with lifetime or annual limits on coverage? Tough. Health insurers will no longer be able to offer such policies, even if that is what customers prefer. (Section 2711).

4. Think you’d like a policy that is cheaper because it doesn’t cover preventive care or requires cost-sharing for such care? Tough. Health insurers will no longer be able to offer policies that do not cover preventive services or offer them with cost-sharing, even if that’s what the customer wants. (Section 2712).

5. You are an employer and you would like to offer coverage that doesn’t allow your employers’ slacker children to stay on the policy until age 26? Tough. (Section 2714).

6. You must buy a policy that covers ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; chronic disease management; and pediatric services, including oral and vision care.

You’re a single guy without children? Tough, your policy must cover pediatric services. You’re a woman who can’t have children? Tough, your policy must cover maternity services. You’re a teetotaler? Tough, your policy must cover substance abuse treatment. (Add your own violation of personal freedom here.) (Section 1302).

7. Do you want a plan with lots of cost-sharing and low premiums? Well, the best you can do is a “Bronze plan,” which has benefits that provide benefits that are actuarially equivalent to 60% of the full actuarial value of the benefits provided under the plan. Anything lower than that, tough. (Section 1302 (d) (1) (A))

8. You are an employer in the small-group insurance market and you’d like to offer policies with deductibles higher than $2,000 for individuals and $4,000 for families? Tough. (Section 1302 (c) (2) (A).

9. If you are a large employer (defined as at least 101 employees) and you do not want to provide health insurance to your employee, then you will pay a $750 fine per employee (It could be $2,000 to $3,000 under the reconciliation changes). Think you know how to better spend that money? Tough. (Section 1513).

10. You are an employer who offers health flexible spending arrangements and your employees want to deduct more than $2,500 from their salaries for it? Sorry, can’t do that. (Section 9005 (i)).

11. If you are a physician and you don’t want the government looking over your shoulder? Tough. The Secretary of Health and Human Services is authorized to use your claims data to issue you reports that measure the resources you use, provide information on the quality of care you provide, and compare the resources you use to those used by other physicians. Of course, this will all be just for informational purposes. It’s not like the government will ever use it to intervene in your practice and patients’ care. Of course not. (Section 3003 (i))

12. If you are a physician and you want to own your own hospital, you must be an owner and have a “Medicare provider agreement” by Feb. 1, 2010. (Dec. 31, 2010 in the reconciliation changes.) If you didn’t have those by then, you are out of luck. (Section 6001 (i) (1) (A))
13. If you are a physician owner and you want to expand your hospital? Well, you can’t (Section 6001 (i) (1) (B). Unless, it is located in a country where, over the last five years, population growth has been 150% of what it has been in the state (Section 6601 (i) (3) ( E)). And then you cannot increase your capacity by more than 200% (Section 6001 (i) (3) (C)).

14. You are a health insurer and you want to raise premiums to meet costs? Well, if that increase is deemed “unreasonable” by the Secretary of Health and Human Services it will be subject to review and can be denied. (Section 1003)

15. The government will extract a fee of $2.3 billion annually from the pharmaceutical industry. If you are a pharmaceutical company what you will pay depends on the ratio of the number of brand-name drugs you sell to the total number of brand-name drugs sold in the U.S. So, if you sell 10% of the brand-name drugs in the U.S., what you pay will be 10% multiplied by $2.3 billion, or $230,000,000. (Under reconciliation, it starts at $2.55 billion, jumps to $3 billion in 2012, then to $3.5 billion in 2017 and $4.2 billion in 2018, before settling at $2.8 billion in 2019 (Section 1404)). Think you, as a pharmaceutical executive, know how to better use that money, say for research and development? Tough. (Section 9008 (b)).

16. The government will extract a fee of $2 billion annually from medical device makers. If you are a medical device maker what you will pay depends on your share of medical device sales in the U.S. So, if you sell 10% of the medical devices in the U.S., what you pay will be 10% multiplied by $2 billion, or $200,000,000. Think you, as a medical device maker, know how to better use that money, say for R&D? Tough. (Section 9009 (b)).

The reconciliation package turns that into a 2.9% excise tax for medical device makers. Think you, as a medical device maker, know how to better use that money, say for research and development? Tough. (Section 1405).

17. The government will extract a fee of $6.7 billion annually from insurance companies. If you are an insurer, what you will pay depends on your share of net premiums plus 200% of your administrative costs. So, if your net premiums and administrative costs are equal to 10% of the total, you will pay 10% of $6.7 billion, or $670,000,000. In the reconciliation bill, the fee will start at $8 billion in 2014, $11.3 billion in 2015, $1.9 billion in 2017, and $14.3 billion in 2018 (Section 1406).Think you, as an insurance executive, know how to better spend that money? Tough.(Section 9010 (b) (1) (A and B).)

18. If an insurance company board or its stockholders think the CEO is worth more than $500,000 in deferred compensation? Tough.(Section 9014).

19. You will have to pay an additional 0.5% payroll tax on any dollar you make over $250,000 if you file a joint return and $200,000 if you file an individual return. What? You think you know how to spend the money you earned better than the government? Tough. (Section 9015).

That amount will rise to a 3.8% tax if reconciliation passes. It will also apply to investment income, estates, and trusts. You think you know how to spend the money you earned better than the government? Like you need to ask. (Section 1402).

20. If you go for cosmetic surgery, you will pay an additional 5% tax on the cost of the procedure. Think you know how to spend that money you earned better than the government? Tough. (Section 9017).

Durbin Statement on Obama Health Care Proposal

From the Office of U.S. Senator Dick Durbin
Monday, February 22, 2010

[WASHINGTON, D.C.] – U.S. Sen. Dick Durbin (D-IL) made the following statement regarding President Obama’s health insurance reform proposal that was released earlier today:

“The President’s health reform proposal brings together the best of the current healthcare proposal – including both Republican and Democratic ideas. President Obama’s plan to give access to affordable health care to over 31 million Americans who currently don’t have it today, will put families not insurance companies back in control of their own health care, drive down health care costs and improve the quality of health care in America.

“On Thursday, I will join Congressional leaders from both sides of the aisle in a meeting to discuss the President’s new plan. I look forward to a discussion with new ideas and bipartisan participation.”

Sen Durbin Gets Congenital Heart Disease Research Included in Healthcare Bill

WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) today announced that portions of his bipartisan legislation to increase awareness, education and research into congenital heart disease – a rapidly growing national health problem – were included in the health care reform bill passed by the Senate. The Congenital Heart Futures Act aims to prevent premature death and disability and increase the quality of life for the nearly 1.8 million people in the United States living with congenital heart disease. Durbin introduced the legislation earlier this year with Senator Thad Cochran (R-MS) and Representatives Zack Space (D-OH) and Gus Bilirakis (R-FL).

“A child is born with a congenital heart defect every fifteen minutes,” said Durbin. “Despite the prevalence of congenital heart disease, research, data collection, education and awareness are limited. This legislation will expand research and broaden its scope to help those currently living with congenital heart disease and perhaps, one day, find cures.”

“We are making progress in the treatment of congenital heart disease as more infants survive what is commonly known as the No. 1 birth defect in the U.S. Now, this provision in health care reform legislation will take us further by expanding research and establishing a surveillance system to allow us to track the epidemiology of the disease,” said Clyde W. Yancy, M.D., President of the American Heart Association. “With advances in treatment, many children with congenital heart defects survive to adulthood, however, survivors with complex forms of the disease are likely to experience additional health problems later in life. That’s why it’s extremely important to coordinate research to improve the prevention, diagnosis and treatment of this disease and remove barriers to care.”

There are over 30 types of congenital heart defects, which occur when the structures of the heart are malformed, missing or in the wrong place during development. Heart defects are the most common and most deadly form of birth defects, affecting nearly 1% of births (approximately 36,000 a year). A child is born with a congenital heart defect every 15 minutes. These defects cause congenital heart disease—cardiovascular problems caused by the birth defect.

In 2004, the National Heart Lung and Blood Institute (NHLBI) convened a working group on congenital heart disease, which recommended developing a research network to conduct clinical research, establishing a national database of patients, and creating an outreach education program on the need for continued cardiac care. Today’s Congenital Heart Futures Act builds upon the NHLBI’s recommendations by:
Developing a National Congenital Heart Disease Surveillance System at the CDC to track the epidemiology of congenital heart disease in individuals of all ages;
Promoting the coordination and expansion of the NHLBI’s congenital heart disease research, including a focus on causation; long term outcomes; diagnosis, treatment and prevention; longitudinal studies; and barriers to care.

While, there is currently no cure for congenital heart disease, modern medicine has made major advances in treating heart defects in newborns. In 1950, a child born with a congenital heart defect only had a 20% chance of surviving, but today that number has increased to 90%. Due to the increase in childhood survival rates, the population of people living with congenital heart disease increases by an estimated 5% every year and there are now 800,000 children and 1 million adults living with this condition.

Survivors of successful childhood intervention, however, face life-long risks including heart failure, rhythmic disorders, stroke, renal dysfunction, and neuro-cognitive dysfunction. The estimated life expectancy for those with congenital heart disease is significantly lower than for the general population – age 55 for those with moderately complex heart defects and 35 to 40 for those with highly complex defects. Less than 10% of adults living with complex congenital heart disease currently receive recommended cardiac care, and many are unaware that they require life-long specialized health treatment.

The following organizations have endorsed this legislation: Advocate Healthcare in Chicago, Illinois; Adult Congenital Heart Association; American Academy of Pediatrics; American Heart Association; Children’s Heart Foundation; Children’s Memorial Hospital in Chicago, Illinois; Congenital Heart Information Network; La Rabida Children’s Hospital in Chicago, Illinois; March of Dimes; National Association of Children’s Hospitals; National Congenital Heart Coalition; and Rush University in Chicago, Illinois.

Durbin Discusses Historic Health Care Vote on the Senate Floor

From the Office of U.S. Senator Dick Durbin
Monday, December 21, 2009

[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) spoke today on the floor of the United States Senate about the need for health care reform. Durbin cited the rapidly rising cost of health insurance as reason the current system is in need of reform.

“I think when the history of the United States senate is written, this vote will be included, because it is a historic vote,” said Durbin. “We considered many issues in the United States Senate of great importance to individuals, groups, states and to our nation. But seldom do we address an issue of this magnitude or scope. This health care reform issue literally touches every person who is following this debate and many who are not even aware of it.”

US Senate Votes to Move Forward on Health Reform

The US Senate tonight voted to allow debate on the Healthcare Reform bill to proceed. This vote, known as Invoking Cloture, takes 60 votes to pass -- which ends debate. The debate that ended was the debate on WHETHER to allow the healthcare bill to come to the floor for consideration. IT WAS NOT A VOTE ON PASSING THE BILL.

By Invoking Cloture -- the Senate voted to cut off a Fillibuster -- which is endless debate, and is used as a tactic to keep some legislation from every being voted upon.

Now, the Senate will take the bill up in debate on the floor after Thanksgiving break.

But there remains MAJOR oppostion to the bill -- even among Democratic Senators --- and the chances of the bill passing the Senate remains very questionable.

Durbin Reaction to President Obama's Address on Health Care Reform

From the Office of U.S. Senator Dick Durbin

[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) issued the following statement tonight following President Obama’s joint address to Congress on health care reform:

“Tonight the President laid out a clear plan to provide stability and security for those with health insurance and access to quality care for those who don’t.”

“Months of delay and distortion have come to an end. For those interested in bringing new ideas to the table – the President has said ‘welcome.’ But for those seeking to prevent tens of millions of Americans’ access to quality health care – we will not accept their cynical agenda.”

“The people of Illinois and the entire nation have waited long enough for health care reform. Now is the time for Congress to act.”

Statement from Illinois Republican Party Chairman Pat Brady on President Obama's Health Care Address to Congress

From the Illinois Republican Party

"At the end of the day, the President's proposal is still a government takeover of our health care system that will cost trillions of dollars and force millions of people from their current health care coverage.

"Republicans are prepared to work in a bi-partisan fashion for health care reform but only when Democrats and President Obama are ready to quit forcing their government run experiment down the throats of the American people."

Text of President Obama's Healthcare Speech to Congress Sept 9, 2009

THE PRESIDENT: Madam Speaker, Vice President Biden, members of Congress, and the American people:

When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression. We were losing an average of 700,000 jobs per month. Credit was frozen. And our financial system was on the verge of collapse.

As any American who is still looking for work or a way to pay their bills will tell you, we are by no means out of the woods. A full and vibrant recovery is still many months away. And I will not let up until those Americans who seek jobs can find them -- (applause) -- until those businesses that seek capital and credit can thrive; until all responsible homeowners can stay in their homes. That is our ultimate goal. But thanks to the bold and decisive action we've taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink. (Applause.)

I want to thank the members of this body for your efforts and your support in these last several months, and especially those who've taken the difficult votes that have put us on a path to recovery. I also want to thank the American people for their patience and resolve during this trying time for our nation.

But we did not come here just to clean up crises. We came here to build a future. (Applause.) So tonight, I return to speak to all of you about an issue that is central to that future -- and that is the issue of health care.

I am not the first President to take up this cause, but I am determined to be the last. (Applause.) It has now been nearly a century since Theodore Roosevelt first called for health care reform. And ever since, nearly every President and Congress, whether Democrat or Republican, has attempted to meet this challenge in some way. A bill for comprehensive health reform was first introduced by John Dingell Sr. in 1943. Sixty-five years later, his son continues to introduce that same bill at the beginning of each session. (Applause.)

Our collective failure to meet this challenge -- year after year, decade after decade -- has led us to the breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy. These are not primarily people on welfare. These are middle-class Americans. Some can't get insurance on the job. Others are self-employed, and can't afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or too expensive to cover.

We are the only democracy -- the only advanced democracy on Earth -- the only wealthy nation -- that allows such hardship for millions of its people. There are now more than 30 million American citizens who cannot get coverage. In just a two-year period, one in every three Americans goes without health care coverage at some point. And every day, 14,000 Americans lose their coverage. In other words, it can happen to anyone.

But the problem that plagues the health care system is not just a problem for the uninsured. Those who do have insurance have never had less security and stability than they do today. More and more Americans worry that if you move, lose your job, or change your job, you'll lose your health insurance too. More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won't pay the full cost of care. It happens every day.

One man from Illinois lost his coverage in the middle of chemotherapy because his insurer found that he hadn't reported gallstones that he didn't even know about. They delayed his treatment, and he died because of it. Another woman from Texas was about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne. By the time she had her insurance reinstated, her breast cancer had more than doubled in size. That is heart-breaking, it is wrong, and no one should be treated that way in the United States of America. (Applause.)

Then there's the problem of rising cost. We spend one and a half times more per person on health care than any other country, but we aren't any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages. It's why so many employers -- especially small businesses -- are forcing their employees to pay more for insurance, or are dropping their coverage entirely. It's why so many aspiring entrepreneurs cannot afford to open a business in the first place, and why American businesses that compete internationally -- like our automakers -- are at a huge disadvantage. And it's why those of us with health insurance are also paying a hidden and growing tax for those without it -- about $1,000 per year that pays for somebody else's emergency room and charitable care.

Finally, our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close. Nothing else. (Applause.)

Now, these are the facts. Nobody disputes them. We know we must reform this system. The question is how.

There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada's -- (applause) -- where we would severely restrict the private insurance market and have the government provide coverage for everybody. On the right, there are those who argue that we should end employer-based systems and leave individuals to buy health insurance on their own.

I've said -- I have to say that there are arguments to be made for both these approaches. But either one would represent a radical shift that would disrupt the health care most people currently have. Since health care represents one-sixth of our economy, I believe it makes more sense to build on what works and fix what doesn't, rather than try to build an entirely new system from scratch. (Applause.) And that is precisely what those of you in Congress have tried to do over the past several months.

During that time, we've seen Washington at its best and at its worst.

We've seen many in this chamber work tirelessly for the better part of this year to offer thoughtful ideas about how to achieve reform. Of the five committees asked to develop bills, four have completed their work, and the Senate Finance Committee announced today that it will move forward next week. That has never happened before. Our overall efforts have been supported by an unprecedented coalition of doctors and nurses; hospitals, seniors' groups, and even drug companies -- many of whom opposed reform in the past. And there is agreement in this chamber on about 80 percent of what needs to be done, putting us closer to the goal of reform than we have ever been.

But what we've also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have towards their own government. Instead of honest debate, we've seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned.

Well, the time for bickering is over. The time for games has passed. (Applause.) Now is the season for action. Now is when we must bring the best ideas of both parties together, and show the American people that we can still do what we were sent here to do. Now is the time to deliver on health care. Now is the time to deliver on health care.

The plan I'm announcing tonight would meet three basic goals. It will provide more security and stability to those who have health insurance. It will provide insurance for those who don't. And it will slow the growth of health care costs for our families, our businesses, and our government. (Applause.) It's a plan that asks everyone to take responsibility for meeting this challenge -- not just government, not just insurance companies, but everybody including employers and individuals. And it's a plan that incorporates ideas from senators and congressmen, from Democrats and Republicans -- and yes, from some of my opponents in both the primary and general election.

Here are the details that every American needs to know about this plan. First, if you are among the hundreds of millions of Americans who already have health insurance through your job, or Medicare, or Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. (Applause.) Let me repeat this: Nothing in our plan requires you to change what you have.

What this plan will do is make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a preexisting condition. (Applause.) As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it the most. (Applause.) They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or in a lifetime. (Applause.) We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. (Applause.) And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies -- (applause) -- because there's no reason we shouldn't be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives. (Applause.)

Now, that's what Americans who have health insurance can expect from this plan -- more security and more stability.

Now, if you're one of the tens of millions of Americans who don't currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. (Applause.) If you lose your job or you change your job, you'll be able to get coverage. If you strike out on your own and start a small business, you'll be able to get coverage. We'll do this by creating a new insurance exchange -- a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It's how everyone in this Congress gets affordable insurance. And it's time to give every American the same opportunity that we give ourselves. (Applause.)

Now, for those individuals and small businesses who still can't afford the lower-priced insurance available in the exchange, we'll provide tax credits, the size of which will be based on your need. And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can't get insurance today because they have preexisting medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. (Applause.) This was a good idea when Senator John McCain proposed it in the campaign, it's a good idea now, and we should all embrace it. (Applause.)

Now, even if we provide these affordable options, there may be those -- especially the young and the healthy -- who still want to take the risk and go without coverage. There may still be companies that refuse to do right by their workers by giving them coverage. The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don't sign up for health insurance, it means we pay for these people's expensive emergency room visits. If some businesses don't provide workers health care, it forces the rest of us to pick up the tab when their workers get sick, and gives those businesses an unfair advantage over their competitors. And unless everybody does their part, many of the insurance reforms we seek -- especially requiring insurance companies to cover preexisting conditions -- just can't be achieved.

And that's why under my plan, individuals will be required to carry basic health insurance -- just as most states require you to carry auto insurance. (Applause.) Likewise -- likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still can't afford coverage, and 95 percent of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. (Applause.) But we can't have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part.

And while there remain some significant details to be ironed out, I believe -- (laughter) -- I believe a broad consensus exists for the aspects of the plan I just outlined: consumer protections for those with insurance, an exchange that allows individuals and small businesses to purchase affordable coverage, and a requirement that people who can afford insurance get insurance.

And I have no doubt that these reforms would greatly benefit Americans from all walks of life, as well as the economy as a whole. Still, given all the misinformation that's been spread over the past few months, I realize -- (applause) -- I realize that many Americans have grown nervous about reform. So tonight I want to address some of the key controversies that are still out there.

Some of people's concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim made not just by radio and cable talk show hosts, but by prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Now, such a charge would be laughable if it weren't so cynical and irresponsible. It is a lie, plain and simple. (Applause.)

There are also those who claim that our reform efforts would insure illegal immigrants. This, too, is false. The reforms -- the reforms I'm proposing would not apply to those who are here illegally.

AUDIENCE MEMBER: You lie! (Boos.)

THE PRESIDENT: It's not true. And one more misunderstanding I want to clear up -- under our plan, no federal dollars will be used to fund abortions, and federal conscience laws will remain in place. (Applause.)

Now, my health care proposal has also been attacked by some who oppose reform as a "government takeover" of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly sponsored insurance option, administered by the government just like Medicaid or Medicare. (Applause.)

So let me set the record straight here. My guiding principle is, and always has been, that consumers do better when there is choice and competition. That's how the market works. (Applause.) Unfortunately, in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up and quality goes down. And it makes it easier for insurance companies to treat their customers badly -- by cherry-picking the healthiest individuals and trying to drop the sickest, by overcharging small businesses who have no leverage, and by jacking up rates.

Insurance executives don't do this because they're bad people; they do it because it's profitable. As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill, they are rewarded for it. All of this is in service of meeting what this former executive called "Wall Street's relentless profit expectations."

Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. (Applause.) And the insurance reforms that I've already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. (Applause.) Now, let me be clear. Let me be clear. It would only be an option for those who don't have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5 percent of Americans would sign up.

Despite all this, the insurance companies and their allies don't like this idea. They argue that these private companies can't fairly compete with the government. And they'd be right if taxpayers were subsidizing this public insurance option. But they won't be. I've insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits and excessive administrative costs and executive salaries, it could provide a good deal for consumers, and would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities. (Applause.)

Now, it is -- it's worth noting that a strong majority of Americans still favor a public insurance option of the sort I've proposed tonight. But its impact shouldn't be exaggerated -- by the left or the right or the media. It is only one part of my plan, and shouldn't be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage available for those without it. (Applause.) The public option -- the public option is only a means to that end -- and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have. (Applause.)

For example -- for example, some have suggested that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others have proposed a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can't find affordable coverage, we will provide you with a choice. (Applause.) And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need. (Applause.)

Finally, let me discuss an issue that is a great concern to me, to members of this chamber, and to the public -- and that's how we pay for this plan.

And here's what you need to know. First, I will not sign a plan that adds one dime to our deficits -- either now or in the future. (Applause.) I will not sign it if it adds one dime to the deficit, now or in the future, period. And to prove that I'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don't materialize. (Applause.) Now, part of the reason I faced a trillion-dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for -- from the Iraq war to tax breaks for the wealthy. (Applause.) I will not make that same mistake with health care.

Second, we've estimated that most of this plan can be paid for by finding savings within the existing health care system, a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care don't make us any healthier. That's not my judgment -- it's the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.

In fact, I want to speak directly to seniors for a moment, because Medicare is another issue that's been subjected to demagoguery and distortion during the course of this debate.

More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That's how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. (Applause.) And that is why not a dollar of the Medicare trust fund will be used to pay for this plan. (Applause.)

The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies -- subsidies that do everything to pad their profits but don't improve the care of seniors. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead. (Applause.)

Now, these steps will ensure that you -- America's seniors -- get the benefits you've been promised. They will ensure that Medicare is there for future generations. And we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pockets for prescription drugs. (Applause.) That's what this plan will do for you. So don't pay attention to those scary stories about how your benefits will be cut, especially since some of the same folks who are spreading these tall tales have fought against Medicare in the past and just this year supported a budget that would essentially have turned Medicare into a privatized voucher program. That will not happen on my watch. I will protect Medicare. (Applause.)

Now, because Medicare is such a big part of the health care system, making the program more efficient can help usher in changes in the way we deliver health care that can reduce costs for everybody. We have long known that some places -- like the Intermountain Healthcare in Utah or the Geisinger Health System in rural Pennsylvania -- offer high-quality care at costs below average. So the commission can help encourage the adoption of these common-sense best practices by doctors and medical professionals throughout the system -- everything from reducing hospital infection rates to encouraging better coordination between teams of doctors.

Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan. (Applause.) Now, much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. And this reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money -- an idea which has the support of Democratic and Republican experts. And according to these same experts, this modest change could help hold down the cost of health care for all of us in the long run.

Now, finally, many in this chamber -- particularly on the Republican side of the aisle -- have long insisted that reforming our medical malpractice laws can help bring down the cost of health care. (Applause.) Now -- there you go. There you go. Now, I don't believe malpractice reform is a silver bullet, but I've talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. (Applause.) So I'm proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. (Applause.) I know that the Bush administration considered authorizing demonstration projects in individual states to test these ideas. I think it's a good idea, and I'm directing my Secretary of Health and Human Services to move forward on this initiative today. (Applause.)

Now, add it all up, and the plan I'm proposing will cost around $900 billion over 10 years -- less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration. (Applause.) Now, most of these costs will be paid for with money already being spent -- but spent badly -- in the existing health care system. The plan will not add to our deficit. The middle class will realize greater security, not higher taxes. And if we are able to slow the growth of health care costs by just one-tenth of 1 percent each year -- one-tenth of 1 percent -- it will actually reduce the deficit by $4 trillion over the long term.

Now, this is the plan I'm proposing. It's a plan that incorporates ideas from many of the people in this room tonight -- Democrats and Republicans. And I will continue to seek common ground in the weeks ahead. If you come to me with a serious set of proposals, I will be there to listen. My door is always open.

But know this: I will not waste time with those who have made the calculation that it's better politics to kill this plan than to improve it. (Applause.) I won't stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what's in this plan, we will call you out. (Applause.) And I will not -- and I will not accept the status quo as a solution. Not this time. Not now.

Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it the most. And more will die as a result. We know these things to be true.

That is why we cannot fail. Because there are too many Americans counting on us to succeed -- the ones who suffer silently, and the ones who shared their stories with us at town halls, in e-mails, and in letters.

I received one of those letters a few days ago. It was from our beloved friend and colleague, Ted Kennedy. He had written it back in May, shortly after he was told that his illness was terminal. He asked that it be delivered upon his death.

In it, he spoke about what a happy time his last months were, thanks to the love and support of family and friends, his wife, Vicki, his amazing children, who are all here tonight. And he expressed confidence that this would be the year that health care reform -- "that great unfinished business of our society," he called it -- would finally pass. He repeated the truth that health care is decisive for our future prosperity, but he also reminded me that "it concerns more than material things." "What we face," he wrote, "is above all a moral issue; at stake are not just the details of policy, but fundamental principles of social justice and the character of our country."

I've thought about that phrase quite a bit in recent days -- the character of our country. One of the unique and wonderful things about America has always been our self-reliance, our rugged individualism, our fierce defense of freedom and our healthy skepticism of government. And figuring out the appropriate size and role of government has always been a source of rigorous and, yes, sometimes angry debate. That's our history.

For some of Ted Kennedy's critics, his brand of liberalism represented an affront to American liberty. In their minds, his passion for universal health care was nothing more than a passion for big government.

But those of us who knew Teddy and worked with him here -- people of both parties -- know that what drove him was something more. His friend Orrin Hatch -- he knows that. They worked together to provide children with health insurance. His friend John McCain knows that. They worked together on a Patient's Bill of Rights. His friend Chuck Grassley knows that. They worked together to provide health care to children with disabilities.

On issues like these, Ted Kennedy's passion was born not of some rigid ideology, but of his own experience. It was the experience of having two children stricken with cancer. He never forgot the sheer terror and helplessness that any parent feels when a child is badly sick. And he was able to imagine what it must be like for those without insurance, what it would be like to have to say to a wife or a child or an aging parent, there is something that could make you better, but I just can't afford it.

That large-heartedness -- that concern and regard for the plight of others -- is not a partisan feeling. It's not a Republican or a Democratic feeling. It, too, is part of the American character -- our ability to stand in other people's shoes; a recognition that we are all in this together, and when fortune turns against one of us, others are there to lend a helping hand; a belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgment that sometimes government has to step in to help deliver on that promise.

This has always been the history of our progress. In 1935, when over half of our seniors could not support themselves and millions had seen their savings wiped away, there were those who argued that Social Security would lead to socialism, but the men and women of Congress stood fast, and we are all the better for it. In 1965, when some argued that Medicare represented a government takeover of health care, members of Congress -- Democrats and Republicans -- did not back down. They joined together so that all of us could enter our golden years with some basic peace of mind.

You see, our predecessors understood that government could not, and should not, solve every problem. They understood that there are instances when the gains in security from government action are not worth the added constraints on our freedom. But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, the vulnerable can be exploited. And they knew that when any government measure, no matter how carefully crafted or beneficial, is subject to scorn; when any efforts to help people in need are attacked as un-American; when facts and reason are thrown overboard and only timidity passes for wisdom, and we can no longer even engage in a civil conversation with each other over the things that truly matter -- that at that point we don't merely lose our capacity to solve big challenges. We lose something essential about ourselves.

That was true then. It remains true today. I understand how difficult this health care debate has been. I know that many in this country are deeply skeptical that government is looking out for them. I understand that the politically safe move would be to kick the can further down the road -- to defer reform one more year, or one more election, or one more term.

But that is not what the moment calls for. That's not what we came here to do. We did not come to fear the future. We came here to shape it. I still believe we can act even when it's hard. (Applause.) I still believe -- I still believe that we can act when it's hard. I still believe we can replace acrimony with civility, and gridlock with progress. I still believe we can do great things, and that here and now we will meet history's test.

Because that's who we are. That is our calling. That is our character. Thank you, God bless you, and may God bless the United States of America. (Applause.)

Text of President Obama's Remarks at Ohio Healthcare Reform Townhall

from the White House

REMARKS BY THE PRESIDENT
AT HEALTH CARE REFORM TOWN HALL

Shaker Heights High School
Shaker Heights, Ohio

July 23, 2009

2:31 P.M. EDT

THE PRESIDENT: Hello, everybody. Thank you. Thank you. Thank, please, everybody have a seat. Thank you. Hello! (Applause.) Hello, Shaker Heights! Hello, Ohio! It is great to be here. There are a couple of quick acknowledgments I want to make. First of all, please give Rick a big round of applause for his introduction. (Applause.)

Some special guests that we've got. First of all, the governor of the great state of Ohio, Ted Strickland, is in the house. (Applause.) There he is right there. Your State Treasurer Kevin Boyce is here. (Applause.) Your Secretary of State Jennifer Brunner is here. (Applause.) The mayor of the great city of Cleveland, Frank Jackson, is here. (Applause.) Shaker Heights Mayor Earl Leiken is here. (Applause.) The Shaker Heights school superintendent Mark Freeman is here. (Applause.)

Not here, but a couple of my favorite people: Congresswoman Marcia Fudge and Sherrod Brown couldn't be here today. They've got work to do in Washington. (Applause.)

It is good to be back in the great state of Ohio. (Applause.) Now, I know there are those who like to report on the back-and-forth in Washington. But my only concern is the people who sent us to Washington -- the families feeling the pain of this recession; the folks I've met across this country who have lost jobs and savings and health insurance but haven't lost hope; the citizens who defied the cynics and the skeptics -- who went to the polls to demand real and lasting change. Change was the cause of my campaign; it is the cause of my presidency.

And when my administration came into office, we were facing the worst economy since the Great Depression. We were losing an average of 700,000 jobs per month. Hundreds of thousands of Ohioans have felt that pain firsthand. Our financial system was on the verge of collapse, meaning families and small businesses couldn't get the credit they need. And experts were warning that there was a serious chance that our economy could slip into a depression. But because of the action we took in those first weeks, we've been able to pull our economy back from the brink.

Now that the most immediate danger has passed, there are some who question those steps. So let me report to you exactly what we've done.

We passed a two-year Recovery Act that meant an immediate tax cut for 95 percent of Americans and small businesses -- 95 percent. (Applause.) It extended unemployment insurance and health coverage for those who lost their jobs in this recession. (Applause.) It provided emergency assistance to states like Ohio to prevent even deeper layoffs of police officers and firefighters and teachers and other essential personnel. (Applause.) At the same time, we took needed steps to keep the banking system from collapsing, to get credit flowing again, and to help responsible homeowners -- hurt by falling home prices -- to stay in their homes.

In the second phase, we're now investing in projects to repair and upgrade roads and bridges, ports and water systems -- and in schools and clean energy initiatives throughout Ohio and all across the country. These are projects that are creating good jobs and bring lasting improvements to our communities and our country.

There's no doubt that the steps we've taken have helped stave off a much deeper disaster and even greater job loss. They've saved and helped create jobs and have begun to put the brakes on this devastating recession. But I know that for the millions of Americans who are looking for work, and for those who are struggling in this economy, full recovery can't come soon enough.

I hear from you at town hall meetings like this. I read your letters. The stories I hear are the first thing that I think about in the morning; they're the last thing I think about at night. They're the focus of my attention every waking minute of every day. The simple truth is that it took years to get into this mess, and it will take more than a few months to dig our way out of it. (Applause.) But I want to promise you this, Ohio, we will get there -- (applause) -- and we are doing everything in our power to get our people back to work. (Applause.)

AUDIENCE MEMBER: We love you, Barack!

THE PRESIDENT: I love you back. (Laughter and applause.)

We also have to do more than just rescue this economy from recession; we need to address the fundamental problems that allowed this crisis to happen in the first place. Otherwise, we'd be guilty of the same short-term thinking that got us into this mess. That's what Washington has done for decades. We put things off. And that's what we have to change.

Now is the time to rebuild this economy stronger than before. Strong enough to compete in the 21st century. Strong enough to avoid the waves of boom and bust that have time and time again unleashed a torrent of misfortune on middle-class families across the country. That's why we're building a new energy economy that will unleash the innovative potential of America's entrepreneurs -- and create millions of new jobs -- helping to end our dependence on foreign oil. (Applause.) We are -- we're transforming our education system, from cradle to college, so that this nation once again has the best-educated workforce on the planet. (Applause.) We are pursuing health insurance reform so that every American has access to quality, affordable health coverage. (Applause.)

I want to talk about health care just for a second. I want to be clear: Reform isn't just about the nearly 46 million Americans without health insurance. I realize that with all the charges and the criticism being thrown out there in Washington, many Americans may be wondering, "Well, how does my family, or my business, stand to benefit from health insurance reform? What's in this for me?" Folks are asking that, so I want to answer those questions briefly.

If you have health insurance, the reform we're proposing will give you more security. You just heard Rick's story. Reform will keep the government out of your health care decisions, giving you the option to keep your coverage if you're happy with it. So don't let folks say that somehow we're going to be forcing government-run health care. It's just not true. And it will keep the insurance companies out of your health care decisions, too -- (applause) -- by stopping insurers from cherry-picking who they cover, and holding insurers to a higher standard for what they cover. (Applause.)

You won't have to worry about receiving a surprise bill in the mail, because we'll limit the amount your insurance company can force you to pay out of your own pocket. (Applause.)

You won't have to worry about preexisting conditions, because -- (applause) -- never again will anyone in America be denied coverage because of a previous illness or injury. (Applause.)

You won't have to worry about losing coverage if you lose or leave your job, because every American who needs insurance will have access to affordable plans through a health insurance exchange -- a marketplace where insurance companies will compete to cover you, not to deny you coverage. (Applause.)

And if you run a small business and you're looking to provide insurance for your employees, you'll be able to choose a plan through this exchange, as well. I've heard from small business owners across America trying to do the right thing, but year after year premiums rise higher and choices grow more limited. And that's certainly true right here in Ohio.

Now, if you're a taxpayer concerned about deficits, I want you to understand I'm concerned about deficits, too. Because in the eight years before we came into office, Washington enacted two large tax cuts, primarily for the wealthiest Americans, added a prescription drug benefit to Medicare, funded two wars -- all without paying for it -- (laughter and applause) -- didn't pay for it. The national debt doubled. We were handed a $1.3 trillion deficit when we walked in the door -- one we necessarily had to add to in the short term to deal with this financial crisis.

Now, I have to tell you, I have to say, that folks have a lot of nerve who helped get us into this fiscal hole and then start going around trying to talk about fiscal responsibility. (Applause.) I'm always a little surprised that people don't have a little more shame -- (laughter) -- about having created a mess and then try to point fingers, but that's another topic. (Laughter.)

Because the truth is, is that I am now President and I am -- (applause) -- and I am responsible, and together we have to restore a sense of responsibility in Washington. (Applause.) We have to do what businesses and families do -- we've got to cut out the things we don't need to pay for the things we do.

And that's why I pledged that I will not sign health insurance reform -- as badly as I think it's necessary, I won't sign it if that reform adds even one dime to our deficit over the next decade -- and I mean what I say. (Applause.)

Now, we have estimated that two-thirds of the cost of reform to bring health care security to every American can actually be paid for by reallocating money that's already in the system but is being wasted in federal health care programs. So let me repeat what I just said: About two-thirds of health care reform can be paid for not with new revenues, not with tax hikes, just with taking money that's not being spent wisely and moving it into things that will actually make people healthy.

And that includes, by the way -- right now we spend more than $100 billion in unwarranted subsidies that go to insurance companies as part of Medicare -- subsidies that do nothing to improve care for our seniors. We ought to take that money and use it to actually treat people and cover people, not to line pockets of insurers. (Applause.) And I'm pleased that Congress has already embraced these proposals. And while they're currently working through proposals to finance the remaining costs, I continue to insist that health care reform not be paid for on the backs of middle-class families. (Applause.)

Now, in addition to making sure that this plan doesn't add to the deficit in the short term, the bill I sign must also slow the growth of health care costs, while improving care, in the long run.
I just came from the Cleveland Clinic where I toured the cardiac surgery unit, met some of the doctors who are achieving incredible results for their patients. There's important work being done there as well as at the University Hospitals and MetroHealth. (Applause.) And Cleveland Clinic has one of the best health information technology systems in the country. And that means they can track patients and their progress. It means that they can see what treatments work and what treatments are unnecessary. It means they can provide better care for patients. They don't have to duplicate test after test because it's all online. They can help patients manage chronic diseases like diabetes and high blood pressure and asthma and emphysema by coordinating with doctors and nurses both in the hospital and in the community.

And here's the remarkable thing: They actually have some of the lowest costs for the best care. That's the interesting thing about our health care system. (Applause.) Often, better care produces lower, not higher, expenses, because better care leads to fewer errors that cost money and lives. You, or your doctor, don't have to fill out the same form a dozen times. Medical professionals are free to treat people -- not just illnesses. And patients are provided preventive care earlier -- like mammograms and physicals -- to avert more expensive and invasive treatment later.

That's why our proposals include a variety of reforms that would save both money and improve care -- and why the nation's largest organizations representing doctors and nurses have embraced our plan. Our proposals would change incentives so that doctors and nurses finally are free to give patients the best care, not just the most expensive care. And we also want to create an independent group of doctors and medical experts who are empowered to eliminate waste and inefficiency in Medicare -- a proposal that could save even more money.

So overall, our proposals will improve the quality of care for our seniors, save them thousands of dollars on prescription drugs, and that, by the way, is why AARP has endorsed our reform efforts, as well. (Applause.)

So the fact is, lowering costs is essential for families and businesses here in Ohio and all across the country. Let's take the Ohio example -- over the past few years premiums have risen nearly nine times faster than wages. That's something that Rick and his wife understand very well. As we meet today, we're seeing double-digit rate increases on insurance premiums all over America. There are reports of insurers raising rates by 28 percent in California; seeking a 23 percent increase in Connecticut; proposing as much as a 56 percent increase in Michigan. If we don't act, these premium hikes will just be a preview of coming attractions. And that's a future you can't afford. That is a future that America can't afford.

We spend one of every six of our dollars on health care in America, and that's on track to double in the next three decades. The biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid. Small businesses struggle to cover workers while competing with large businesses. Large businesses struggle to cover workers while competing in the global economy. And we'll never know the full cost of the dreams put on hold, the entrepreneurial ideas that are allowed to languish, the small businesses never founded -- because of the fear of being without insurance, or having to pay for a policy on your own.

So, Ohio, that's why we seek reform. And in pursuit of this reform we've forged a consensus that has never before been reached in the history of this country. Senators and representatives in five committees are working on legislation; three have already produced a bill. Health care providers have agreed to do their part to reduce the rate of growth in health care spending. Hospitals have agreed to bring down costs. The drug companies have agreed to make prescription drugs more affordable for seniors. The American Nurses Association, the American Medical Association, representing millions of nurses and doctors who know our health care system best, they've announced their support for reform. (Applause.)

So we have never been closer -- we have never been closer to achieving quality, affordable health care for all Americans. But at the same time, there are those who would seek to delay and defeat reform -- is that the air-conditioning? (Laughter.) That's good. It's a little warm. (Applause.) You can still hear me, though.

You know, we had one Republican strategist who told his party that even though they may want to compromise, it's better politics to "go for the kill." Another Republican senator said that defeating health reform is about "breaking" me -- when it's really the American people who are being broken by rising health care costs and declining coverage. (Applause.) You know, the Republican -- the Republican Party chair, seeking to stall our efforts, recently went so far as to say that health insurance reform was happening "too soon."

Well, first of all, let me just be clear. If there's not a deadline in Washington, nothing happens. (Laughter.) Nothing ever happens. And, you know, we just heard today that, well, we may not be able to get the bill out of the Senate by the end of August -- or the beginning of August. That's okay. I just want people to keep on working. Just keep working. (Applause.) I want the bill to get out of the committees; and then I want that bill to go to the floor; and then I want that bill to be reconciled between the House and the Senate; and then I want to sign a bill. And I want it done by the end of this year. (Applause.) I want it done by the fall. (Applause.)

Whenever I hear people say that it's happening too soon, I think that's a little odd. We've been talking about health care reform since the days of Harry Truman. (Laughter.) How could it be too soon? I don't think it's too soon for the families who've seen their premiums rise faster than wages year after year. It's not too soon for the businesses forced to drop coverage or shed workers because of mounting health care expenses. It's not too soon for taxpayers asked to close widening deficits that stem from rising health care costs -- costs that threaten to leave our children with a mountain of debt.

Reform may be coming too soon for some in Washington, but it's not soon enough for the American people. (Applause.) We can get this done. We don't shirk from a challenge. (Applause.)

We can get this done. People keep on saying, wow, this is really hard, why are you taking it on? You know, America doesn't shirk from a challenge. We were reminded of that earlier this week, when Americans and people all over the world marked the 40th anniversary of the moment that the astronauts of the Apollo 11 walked on the surface of the moon. It was the realization of a goal President Kennedy had set nearly a decade earlier. Ten years earlier he'd said we're going to the moon. And there were times where people said, oh, this is foolish, this is impossible. But President Kennedy understood and the American people set about proving what this nation is capable of doing when we set our minds to doing it.

There are those now who are seeing our failure to address stubborn problems as a sign that our best days are behind us; that somehow we've lost our sense of purpose, and toughness, and capacity to lead; that we can't do big things anymore. Well, I believe that this generation, like generations past, stand ready to defy the skeptics and the naysayers, that we can once again summon this American spirit. We can rescue our economy. We can rebuild it stronger than before. We can achieve quality, affordable health care for every single American. That's what we're called upon to do. That's what we will do with your help, Ohio. (Applause.) With your help. (Applause.)

All right, thank you.

All right. All right, this is the fun part where we get to ask questions. I'm going to -- I'm going to take off my jacket, guys, so if you want to do the same thing -- it's a little hot. (Applause.) All right. Now, here's how this is going to work. There are really no rules. We haven't asked -- you know, there's no preprogrammed questions. All you have to do is -- first of all, everybody should sit down. (Laughter.)

The second thing is, I'm just going to call on as many people as we can during the time that we have, and I'm going to -- just to make sure it's fair, I'm going to call on girl, boy, girl, boy. (Laughter.)

So just raise your hand if you've got a question. Try to keep the question relatively brief; I'll try to keep my answer relatively brief, and we'll try to get through as many as we can. And introduce yourself, if you don't mind. There are people in the audience with mics and so if you can wait for the microphone so you can introduce yourself and then ask the question so that everybody can hear you. Okay?

All right. This young lady right there in the colorful blouse right there -- that's you. Colorful dress.

Q Hello?

THE PRESIDENT: Hello.

Q Good afternoon, Mr. President. Thank you for taking my question. My name is Norma Goodman. My question regarding health care is twofold. It appears that your plan has the health care industry funding your health care reform, and I think you just alluded to that a little. It poses a concern for me -- I'm the owner of a Medicare-certified home care agency. And by the way, my agency wanted to invite you to come on a home visit with us. (Laughter.)

But your proposed budget includes drastic cuts to reimbursement. I feel that that threatens the -- you're shaking your head no?

THE PRESIDENT: I don't think so. I should point out, if I'm not mistaken, that the home care industry has actually endorsed this reform effort and are moving forward, but go ahead and finish your question.

Q Well, that is my concern, that your budget proposal has lined up, from MedPAC's recommendations, cuts for the next several years that will amount to, I don't know, $13 billion or something like that over the next few years.

THE PRESIDENT: Okay, well, let me just respond. The MedPAC idea is to have health care experts and doctors sit down and figure out how can we improve Medicare, how can we make it more cost-efficient. It is not an exercise in just cutting reimbursement rates. In fact, in some cases, we may need higher reimbursement rates for certain aspects. I actually think home care ends up being cost-efficient in many cases rather than institutional care -- and it helps keep people in their homes. (Applause.)

In rural communities, in rural communities, there are certain areas where doctors aren't reimbursed at an adequate level, and so you're seeing too many doctors leave those communities.

So what we do want to make sure of, though, is that we are, in our reimbursement systems, we're incentivizing smart things. So, for example, right now if a hospital is reimbursed for the number of tests that it does, then that may not give them much of an incentive to make their system more efficient so that once you take that first test and you've gone in the hospital, then you end up having that test sent around to everybody so you don't have to take five more tests. But right now the way the reimbursement system is set up, you don't have that incentive to just have the one test and then use information technology to distribute it throughout the system.

So those are the kinds of changes that we want to make. We think that the more that we're encouraging efficient, smart care, that's going to be good for providers, that's going to be good for patients, that'd actually freeze up more money so that we, in some cases, can provide higher reimbursements for folks who right now are not getting sufficient reimbursement. It's a matter of using the dollars that we're spending more wisely than we're spending them right now. Okay, all right.

Q Thank you.

THE PRESIDENT: Thank you.

Gentleman in the red right there.

Q Well, first, Mr. President, welcome to Shaker Heights.

THE PRESIDENT: Thank you.

Q The city that makes things work. (Laughter and applause.) My question and maybe my request is this: Are you willing to urge Senator Reid and Speaker Pelosi to stay in Washington and get this job done?

THE PRESIDENT: Well, I tell you what, I think Senator Reid said today that he thought that we can get this bill out of the Senate Finance Committee by the time of recess, and that in early fall they will come back and actually vote on the bill. Now, I haven't talked to him today.

My attitude is I want to get it right, but I also want to get it done promptly. And so as long as I see folks working diligently and consistently, then I am comfortable with moving a process forward that builds as much consensus as possible. What I don't want is what I referred to in my speech, delay for the sake of delay -- delay because people are worried about making tough decisions or casting tough votes. That's what I don't want to see.

So if people are legitimately working out tough problems -- and some of these problems are tough. I mean, this is a big system and it's complicated. So I have no problem if I think people are really working through these difficult issues and making sure that we get it right. But I don't want to delay just because of politics. And I have to tell you, sometimes delays in Washington occur because people just don't want to do anything that they think might be controversial.

And you know what? That's now how America has made progress in the past. Medicare was controversial. Social Security was controversial. People accused Franklin Delano Roosevelt of being a socialist because he wanted to set up a system to make seniors a little more secure. Going to the moon was controversial. But at some point, if we're going to move this country forward, we can't be afraid to change, especially a system that we know is broken. We've got to get it done and we've got to get it done soon. (Applause.)

All right. This young -- that lady right there, who's waving at me. (Laughter.)

Q Thank you very much. My name is Semanthie Brooks and I'm the director of Community Advocacy for the Benjamin Rose Institute in Cleveland.

THE PRESIDENT: Okay. (Applause.)

Q I also represent a group called Senior Voice and we, by the way, sent over 4,000 signatures to our congressional members asking their support of Medicare. And so my question is about Medicare and the doughnut hole in particular. We know that about 3.4 million seniors will fall into the doughnut hole on an annual basis. This represents about one in four seniors that will participate in the Part D program. When seniors fall into the doughnut hole, they then have to make choices about whether or not they take their medications; they break their pills in half; they make a decision about buying medication or purchasing food. My question to you, Mr. President, is that, will you support legislation that is currently being introduced in the House to close the doughnut hole over the next several years? (Applause.)

THE PRESIDENT: Well, I'm going to do more than that for you. In our health care reform proposal we have already extracted concessions from the pharmaceutical industry that we know will right away close half of that doughnut hole. They've already put $80 billion on the table. That's part of the reason AARP endorsed the bill.

Now, by the way, for those of you who don't know what the doughnut hole is, the way the Medicare prescription drug plan works is that it helps you pay for your prescription drugs until you hit a certain ceiling, a certain level of several thousand dollars, and then suddenly, the subsidies, the help from the federal government just go away. And you've got to pay out-of-pocket expenses of several more thousands of dollars until you get to the point where help kicks in again. So that's why they call it the doughnut hole, because there's a hole right in the middle where you don't get any help. And it costs seniors thousands of dollars.

One of the things that we can do through reform is to make sure that we are moving to close that doughnut hole. That's a commitment that will be contained in this health care reform bill that we get passed. (Applause.)

All right. This young man right here. We'll get a young guy in here.

Q Hi, Mr. President. My name is Brooks Boran (ph). I am going to be a junior in high school. My question is, for a student, how can we help get this reform passed? (Applause.)

THE PRESIDENT: Well, I appreciate that, I like that. Well, first of all, I very much appreciate that as a junior in high school you're still thinking about -- you're already thinking about this, because usually young people, they think they're indestructible so they don't need health care. (Laughter.) And in fact, a high proportion of the uninsured are actually young people, particularly right after they graduate from college, they haven't gotten a job yet that provides health care, and they are very vulnerable if, heaven forbid, something happens to them.

There have been a couple of ideas that we've talked about -- for example, extending the insurance of parents, making insurance companies provide -- keep kids on their insurance until they're 25. That would help a lot. (Applause.)

But the question you asked was how can you help get it done. Number one, make sure you're persuading your parents if they're not already convinced. But Mom is right there, so she's already on board. (Laughter.)

I think that activism right now, in calling your congress people, calling your senators, making sure they know this is important -- that's something that everybody here needs to do because, frankly, they are hearing from the other side. All those folks who are out there saying we can't afford this, this is socialism, this will lead to government-run health care; all the folks who are getting ginned up on talk radio and some of these cable news shows -- I have to say that they have an effect on members of Congress. It makes members of Congress nervous. So they need to hear from folks who are saying in a very common-sense way, this is something we can do.

It's going to be paid for. It is not going to add to the deficit. It will, in fact, control the deficit over the long term. And young people should particularly be concerned about that, because if health care inflation keeps going up at the rate that it is, you won't -- when your generation is running things -- won't be able to afford anything else in the federal budget. Medicare and Medicaid will consume all our health care dollars -- or all our federal dollars. That's a huge problem.

But the last thing I just want to emphasize to people, when you contact your senators, when you contact your members of Congress, make sure to make this a personal testimony. Tell your story about why you're concerned. Because sometimes these debates get so abstract, and I have to remind people -- you know, I get a story about a woman who contracts cancer, and suddenly not only is she worrying about her cancer, but she's also worrying about the $100,000 worth of unpaid medical bills that she's having to deal with and her family can't afford.

I hear from people who say, "I've always worked hard, I've always done well, I've got a good job. I left my job to start my business. Suddenly I find out I can't get health insurance because of a preexisting condition. And so I'm going to have to close up my business and I'm going to have to go back to doing something where I can get health insurance."

I mean, those stories, everybody knows them. And one of the things that I emphasized yesterday that people I think don't maybe think about enough is, if all that money is being eaten up in premiums, even if your employer is paying for them, guess what. That means that employer has got less money to give you a raise. So you wonder why, for the last 10 years, wages and incomes have been flat. If you look, on average, people haven't gotten a raise. Why is that? Well, part of it is because it's all been taken up in increased health care costs, even if the companies are profitable.

And, you know, the group that actually understands this best is folks who are members of unions because -- and the reason is, what happens? You guys go into negotiations, and your employer, even if they're well-meaning, even if they want to cooperate with the union, they say, "Look, guys, I can't afford to give you a raise -- I can't afford to raise the hourly wage because look at what's happened to my health care rates." And your whole negotiation ends up being how much more of a health care burden are you going to have to carry when you thought those benefits were already locked in.

So that's why health care reform is so important even if you've got health insurance, because it is taking money out of your pocket and it's leaving a lot of people in very dire straits. So, all right? (Applause.) Okay.

This young lady right here. There's a gentleman who is coming with a microphone.

Q Hello, Mr. President. I'm Dr. Diana Lee Macron (ph). And I have a question. The Republicans and some Democrats want to tax health care benefits. Using one of the local Council of Smaller Enterprise plans, an individual male would pay $1,500 at the age of 24; $5,200 at age 50; and almost $10,000 at age 60 for the same plan. For a female employee, it would cost $3,300 at age 24, and $6,400 at age 50. Family plans are more.

A tax credit can only benefit those who make enough money to use a tax credit. Most people don't need a tax credit. How would you make the taxing of benefits equitable to older and female workers?

THE PRESIDENT: Well, let me -- just to make sure I understand your question -- or I'll try to answer what I think your question was. First of all, in terms of taxing benefits, I said I oppose the taxing of health care benefits that people are already receiving, so that's not a proposal that I'm supportive of. (Applause.)

There is being discussed in the Senate Finance Committee the fact that some folks have Cadillac plans, meaning -- let's -- just to give you an example, the average member of Congress's plan, I think, is somewhere -- it's either $13,000 or $17,000 or $14,000; it's somewhere in that range. So that's a pretty good plan. That's what members of Congress get.

Now, what the Senate Finance Committee has been saying is maybe when you get to a $25,000 plan -- so one that's a lot more expensive and a lot fancier than the one that even members of Congress get -- maybe at that point what you should do is you should sort of cap the exclusion, the tax deduction, that is available so that we're discouraging these really fancy plans that end up driving up costs. That's the debate that's been taking place, and I think that is at least -- I haven't signed on to that approach, but I think it's a legitimate debate to have.

But what I said and I've taken off the table would be the idea that you just described, which would be that you would actually provide -- you would eliminate the tax deduction that employers get for providing you with health insurance, because, frankly, a lot of employers then would stop providing health care, and we'd probably see more people lose their health insurance than currently have it. And that's not obviously our objective in reform. Okay?

All right, let's see, this young man right here. He's got a bowtie on, he looks very sharp. (Applause.) Here, you can use my mic.

Q Hi, I'm Brandon Patterson and I'm Shaker Heights senior class president. And I want to say, on behalf of the entire -- (applause.) (Inaudible) -- but my question is -- she kind of touched on it earlier, and you kind of said that you're going to, with the health care, extend the age where we can go on our parents' health care. But we see that many states have passed reforms where they extended the age to 26 and 30 (inaudible) that we, at 19 -- or 29 -- that we still are the main -- the largest percent of people who do not have health insurance. So my question to you is actually, how can we be guaranteed?

THE PRESIDENT: Well, keep in mind that one way of dealing with this is having health insurance reform so that young people are covered under their parents' plan while they're in that transition period from college to a job.

But anybody under the plan that we proposed and actually we're seeing consensus in Congress about, anybody would be eligible to go ahead and get health insurance through what we're calling this exchange with subsidies with help from the federal government if you can't afford it, so that you'd still be able to get health insurance even if you're 20 or 21 or 22 as long as you are eligible financially. I mean, if you're LeBron James -- I love LeBron, but he doesn't need a subsidy from the federal government for health insurance. (Laughter.)

But assuming you're -- you qualify in terms of income, where you're a working person who's not making a lot of money, doesn't get health insurance on the job, regardless of age, you would then be eligible to go ahead and buy health insurance through this exchange. That's the whole idea, is that we're creating a system where anybody who doesn't have health insurance is able to go and look up and see these choices.

By the way, this exchange has a lot of private plan options in it, if that's what you prefer. And you could choose the plan that you think works best for you and we would then help you be able to purchase that insurance. And any insurer who was in the exchange would have to abide by certain rules, like you can't exclude people for preexisting conditions; like they can't just drop you if they decide that you get too sick; you can't lose your insurance just because you change jobs. Right? So we would be reforming the insurance industry and you would be able to get access for insurance that you could count on over the long term.

All right? Okay. It's a young lady's turn. Let's see -- I've sort of neglected I think way up there. All right, that young lady standing up right there -- no, no, no, I'm sorry, I know you're excited, but I was pointing at her right there. (Laughter.) But I love you too, though. (Laughter.) Okay, right there -- yes. No, right there -- yes.

Q Me?

THE PRESIDENT: You, yes.

Q Thank you, Mr. President. My name is Aimee Vance. I'm an RN that works for the Cleveland Clinic and Community Outreach. We serve the uninsured and are doing some great things there. This is Connie Robinson; she's a counselor also that works with me. (Laughter.) My question is, in the health care reform bill that you are putting together, are there going to be provisions for insurance companies to get paid for providing health education and health promotion type of things for their people as well as more help with mental health services, because it's a huge deficit. (Applause.)

THE PRESIDENT: Well, I've long been a supporter of mental health services as part of a package and I think that's important, but I really want to focus on, in addition, what you just mentioned, which is issues of prevention and wellness. This can make such a huge difference and, you know, I was meeting with some of the officers here at the Cleveland Clinic -- they're all sitting up front here; very serious guys, they do outstanding work.

One of the things that's exciting, though, in addition to the big fancy hospital with all the fancy equipment, they've also -- are linked up with all these family clinics all throughout the area. And one of the things that a clinic and a family physician can do is to focus on preventable diseases, making sure that you are helping somebody with a nutritionist to keep their weight down before they get diabetes as opposed to, you know, paying for a surgery for a foot amputation. (Applause.) If they already have diabetes, then having a counselor who's working with them monthly to make sure that they are maintaining the regimens to keep their diabetes under control -- that is cost-efficient.

But the problem is, right now, that a lot of the health system doesn't reimburse and incentivize that kind of preventive work and that wellness work. And so what we want to do is absolutely in this reform package, there will be reimbursements for and incentives for prevention and wellness, and we're going to make sure that those are the things that don't require out-of-pocket costs for the patient so that they're not being discouraged from using it, but rather they're being encouraged from using it -- that will make all the difference in the world. (Applause.)

All right. How much time we have? Okay, I've got time -- I'm sorry, guys -- I only have time for one more question. One more question. And I've got to say, I apologize, guys, but I'm going to go with -- I'm going to go with another young person here -- this young man right there, who's got a jacket on, so he's looking very sharp. (Laughter and applause.) Thanks for dressing up, guys -- you got the bowtie, you got the jacket. I didn't dress that good when I was their age. (Laughter.)

Q Thank you, Mr. President. My name is Parker Smith. I'm 14 years old; I'm going to be a freshman here.

THE PRESIDENT: Okay, Parker.

Q All right. How can you reassure many Americans around the country that your health care proposal isn't too much, too fast?

THE PRESIDENT: Well, I think that's a great question. That's a great question. (Applause.) First of all, I do think that sometimes people get the idea -- you know, I had said, let's get this done by August. Now, what I was referring to is, let's get bills voted out of the House and the Senate by August. That still means that we'd have to come back in the fall; we'd have to reconcile the differences between the Senate bill and the House bill; have a new bill; it would go back to the Senate and the House again to be voted on; then finally come to my desk. Our target date is to get this done by the fall. That's the bottom line. But keep in mind that even if we got it done in the fall, most of these changes would be phased in over several years. So it's not as if you're going to wake up tomorrow and suddenly the health care system is all changed completely. We are going to phase this in, in an intelligent, deliberate way.

But there are some changes that I think have to take effect pretty quick; for example, making sure that we're reducing prescription drugs for seniors. We shouldn't have to wait a long time to get that done. (Applause.) We shouldn't have to wait a long time to make sure that people don't lose their insurance because of a preexisting condition. There are some things that I think that we can start implementing where there's a pretty broad consensus it needs to get done.

Now, is it too much? I don't think it's too much. It's only too much by the standards of Washington politics today, which is basically that anything just becomes this big tangle of who's up and who's down, and who's advantaged and who's not, and the special interests and the lobbyists are all scurrying around. By that standard -- I know I'm working people pretty hard up on Capitol Hill -- but you know what, this is not too much.

What we're talking about is not completely scrapping the existing health care system. All we're saying is if you've got health insurance, you can keep it. If you don't have health insurance, you can now afford to buy it with some help. If you have health insurance, we're going to reform the insurance industry so that it can still make a profit, it can still offer good services to its patients -- or to its customers; it just can't engage in some of these rules that basically have them collecting a lot of premiums but not wanting to pay out when people really need it and when people get sick. (Applause.)

So -- and what we want to do -- now, here's what is complicated, is changing the delivery systems so that we actually start getting more quality for less money. That's going to take some time. It's not going to happen overnight.

The reason I visited the Cleveland Clinic is because along with the Mayo Clinic, they have been able to drive down costs more than any other health care system out there, while maintaining some of the highest quality.

Now, when I asked how did you go about doing it, well, they started this thing -- when was it started, Cleveland Clinic? 1921. And they -- what they've done is -- for example, doctors who are part of the Cleveland Clinic get paid a salary instead of being paid fee-for-service. So that makes it easier for them to make some of these changes, because people don't feel like maybe they're losing some money out of pocket; they just know that they're getting a salary.

Now, that's not maybe the thing that every doctor is going to want to do. But there are other ways that we can take that same approach where they start thinking in terms of what's needed for the patient, and making sure that they're getting reimbursed for what's good for the patient, and they don't then have to worry about what's the government saying, or what's the insurance company saying; am I going to get reimbursed for this, am I not going to get reimbursed for this, do I have to fill out 15,000 forms.

I've said before, most people who are doctors or nurses, they didn't get into it to fill out forms; they got into it to make people feel better, to heal the sick, and that's what we want to free them up to do, but it will take a little time to get there. (Applause.)

So, all right, everybody, stay on your members of Congress. Keep up the heat. We've got to get this done. Thank you. Love you. Bye. (Applause.)

END 3:25 P.M. EDT